Tata Motors share price in focus ahead of Q1 results today: Here’s what analysts expect

Stock Market Today: Tata Motors share price price have seen sharp 46.6% rise during 2024 to date. The rally in Tata Motors share price has been helped by strong passenger Vehicle growth, stable Commercial Vehicle outlook despite challenges, Electric Vehicle focus and JLR prospects.

However investors remain cautious ahead of Q1 results as Tata Motors share price was trading more than 1% lower on Thursday during morning trades

Industry scenerio and expectations

For the industry Passenger vehicle volumes grew by around 6% while commercial Vehicle volumes grew by around 4% during Q1. For Tata Motors the Commercial Vehicle volumes in India during Q1 were up 5.4% year-on-year, the PV volumes were marginally down.

The rising raw material prices especially of Aluminium, Copper and the precious metals however rose. Despite soft steel prices operating performance of various manufacturers as Tata Motors will be watched though analysts remain positive in cost initiatives by Tata Motors.

In Q1FY25, average steel HRC prices (ex-Mumbai traders market) have remained soft while Aluminium, Copper, Lead prices have witnessed a price increase of 4-15% sequentially, as per Axis Securities Data.

Similarly Platinum/Rhodium prices have increased by 8%/5% respectively on a sequential basis, while Palladium declined marginally by 1% sequentially. These price movements are expected to have some negative impact on margins

Tata Motors expectations

Revenue growth year on year (yoy) for Tata Motors is likely to be supported by growth in JLR (Jaguar Land Rover) and India Commercial Vehicles divisions, said Nuvama Institutional Equities. Ebitda margin is expected to expand on better pricing and cost reduction efforts they added.

Ebitda stands for earnings before interest tax depreciation and amortisation.

India business performance was a mixed bag as per Motilal Oswal Financial Services as Commercial vehicle volumes grew 6% YoY and Passenger Vehicle volumes declined 1% YoY. The Commercial Vehicle and Passenger Vehicles Ebit margin is likely to contract 190bp and 50bp respectively sequentially as per them due to lower volumes

JLR volumes however are expected to see 3% YoY growth and MOFSL estimates an EBIT margin of 7.5% ( 170bps lower sequentially) for JLR, led by unfavorable product mix, rising spends and lower volumes. Overall, MOFSL expect the consolidated entity to post 8.5% YoY growth in 1Q earnings

For Tata Motors, JLR shipments (excluding China JV) rose 5% YoY (11% lower sequentially) while share of higher-margin products (RR, RR Sport and Defender) in volumes rose to 68% in 1QFY25 vs 63% in FY24, highlighted Jefferies (India) Pvt Ltd.

Key Monitorable

Key thing to watch out during Q1 results will be management view on JLR and India CV demand outlook.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions